Determination of the optimal strategy for the presence of a retailer in the next day’s electricity market based on the risk index

Recently in Iran, due to the growing trend of electric energy consumption and the limitations of state resources in creating new capacities in the sectors of production, transmission, and distribution, the issue of privatization and restructuring in the electricity industry has been the same as in other countries of the world. At the moment, the wholesale market has begun its business, and soon it will include other sectors of the electricity industry, and distribution companies will be the primary buyers of electricity in this market. These companies should plan a properly understandable structure of the electricity market to have a successful presence in it. Therefore, the determination of a good strategy for the participation of distribution and retail companies in the competitive electricity market is important. In this paper, due to the importance of the issue, the determination of the optimal strategy for the presence of a retailer in the competitive markets has been addressed. A linear model, which considers the behavior of a retailer in wholesale and retail markets, has been presented. Artificial neural networks are used to generate sce narios of price and consumer demand. In addition, the retailer determines its maximum profit based on taking into account different pricing methods offered to the end consumers. In this study, by present ing an indicator for calculating the risk in the decisions of the retail company, the role of this factor is discussed in the company’s profits. According to the results, in the real-time pricing mode, the retailer increases its dependency on the pool, compared with the time of use and fixed pricing methods. In ad dition, the expected profit of the retailer has an inverse relationship with the amount of risk-aversion by the retailer.